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Terms in this set (11)
An independent audit aids in the communication of economic data because the audit.....
Lends credibility to the Financial Statements
Which of the following best describes the reason why an independent auditor is often retained to report on financial statements?
Different interests may exist between the entity preparing the statements and the persons using the statements, and thus outside assurance is needed to enhance the credibility of the statements.
What best describes relationships among auditing, attest, and assurance services
Auditing is a type of assurance service
What statement relating to attest and assurance service is not correct
Financial statement auditing is a form of attest service but is not an assurance service
For what primary purpose does the auditor obtain an understanding of the entity and its environment?
To plan the audit and determine the scope of audit procedures to be performed
What statement best describes the role of materiality in a financial statement audit?
The lower the level at which the auditor assesses materiality, the greater the amount of evidence the auditor must gather
What is the most important reason for an auditor to gain an understanding of an audit client's system of internal control over financial reporting?
Understanding a client's system of internal control can help the auditor assess risk and identify areas where financial statement misstatements might be more likely
Preplanning an audit includes....
Understanding the client and the client's industry; Determining audit engagement team requirements; Ensuring the independence of the audit team and audit firm
What statement best describes what is meant by an unqualified audit opinion?
Issuance of a standard unqualified auditor's report indicates that in the auditor's opinion the client's financial statements are fairly presented in accordance with agreed-upon criteria, with no need for the inclusion of qualifying phrases
The auditing standards used to guide the conduct of the audit are....
Explicitly referred to in the opinion paragraph of the auditor's standard report
The auditor is unable to convince the client to alter its accounting treatment. The rest of the financial statements are fairly stated in the auditor's opinion. Which kind of audit report would an auditor most likely issue under these circumstances?
Qualified opinion due to departure from GAAP.
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